Finance Division rebuts reports on govt borrowing from SBP

MG News | April 28, 2022 at 11:38 AM GMT+05:00

0:00

April 28, 2022 (MLN): Ministry of Finance on Thursday has clarified that the news circulating on social media, giving an impression that the government has borrowed from the State Bank of Pakistan (SBP) is grossly incorrect while it depicts a limited understanding of the monetary variables, said a press release.

As reported in the monetary tables (M2), the government’s borrowing from the SBP for budgetary purposes is calculated as the difference between the government’s stock of borrowing from the SBP and its deposits with the SBP. it said.

Therefore, the net borrowing numbers may change due to fluctuation in cash balance with SBP and other accounting conventions. This change is not fresh budgetary borrowing by the government from SBP but just a change in the government’s cash balance with the SBP, it added.

The government remains committed to complying with its obligations under the amended SBP Act and IMF program conditions. There have been no fresh borrowings by the government from the SBP. In fact, the government has been retiring its previous stock of debt with the SBP on its maturity.

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